• • Teemu Salmi, Senior Vice President, Chief Information Officer, Stora Enso

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Transcript

Sanjog Aul [00:00:24]:

Hello, and welcome to the next one. Hello, and welcome to CTN. To learn more about the show, please visit ciotalknetwork.com, and the topic for today is Steps To Enabling A Digital Culture. So digital transformation, it is a buzzword, and we have done a lot over the years in this area. What organization have tried to do has they have tried to exploit the analytics, the AI, and all the data-centric capabilities. They’ve also tried to do things related to modernizing the core technologies they have so that they can exploit digital, and then even use digital transformation to look within and operationalize the whatever the operations they have, they want to optimize those operations. All of that said, it’s great as part of the digital transformation effort, but what about the underlying digital culture that you need to develop? Because that’s where everyone who you involve would be open to embracing risk. They would be committed to changing the siloed mindsets, and as a team, would like to stay focused, relentlessly focused on the customer. In absence of that digital culture, we have seen many organizations failing in their digital transformation effort, but what can we do different, better, or new? To discuss this, I have with me Teemu Salmi, senior vice president, chief information officer with Stora Enso. Hey, Teemu. How are you?

Teemu Salmi [00:02:03]:

I’m good. Great to be here. Thanks for having me today.

Sanjog Aul [00:02:06]:

Absolutely, sir. The pleasures are. So let’s jump in. We all want to invest in digital and want to be successful, and organizations have jumped on this bandwagon quite a bit for quite a few years, and we have had mixed results. So these are measurable projects when we talk about, you want to operationalize a certain, optimize a certain aspect of an operation, or you want to do an AI and analytics kind of project or capability, or modernize a core technology. That’s great. It’s a project start and end with a well defined outcome. When we talk about digital culture, which is the focus of this topic, it’s fuzzy for many. So what should be a tenets of a good culture, and is there a way for us to measure or to benchmark it at different points in our digital transformation journey, so that we know we are making measurable progress if at all?

Teemu Salmi [00:03:13]:

I think it’s a great question, and I think there’s probably many answers to those questions, and I think you mentioned a couple of them already in your introduction to the topic today, but if I look at a couple of enabling factors from our perspective, how we have approached it, I think that usually, when I talk about successful digital transformation, I talk about the five C’s. Any company wants to be successful with the digital transformation needs to have the five C’s, and I think one of the C’s is related to C level commitment. I think if the leadership, the executive leadership doesn’t believe in the digital transformation and doesn’t understand, there’s a literacy question as well. What does it actually mean to drive digital transformation? I’m afraid that you’re gonna have maybe a small innovation hub just to get the tick in the box saying, yeah, we are doing some digital transformation, but if you have real C level commitment, then, actually, it’s an executive team that cares, that follows up, and actually allocates the second C, which is capital. Because you need money. You need funds to actually drive an innovation agenda, to drive a digital transformation agenda. Because without money, without the capital, it simply ain’t gonna happen. So a couple of the C’s is C level commitment and then, of course, the capital in order to make it happen, and the third element, which is then it’s a vehicle that you need as well. Now I’m jumping out of my five C’s and I want to share with you one thing that we have done, I think, quite successfully in order to get the innovation vehicle going. We talked about the C and the capital allocation. We decided almost five years ago to spend over €10,000,000 every year in digital innovation. So then you’re probably asking yourself, how are you spending that money? And we invented something we call a DigiFund. So we believe in the innovation power of all our employees. We’re a company of 25,000 employees, and we believe in the innovation power of all of our employees. So we said that anyone who has a great idea of how to improve something, improve efficiency, improve the ways of working that we have today, or has an idea of a new business development, new revenue streams, or new business models, can apply funding from the DigiFund to test that idea, and then we have created a process for how to very quickly go from a concept to a proof of concept to pilot and then, you know, MVP and eventually a rollout and scale up if it actually is something successful. So that for us has been an extremely good vehicle to build a culture where people actually are allowed to ask for funding, allowed to spend time on digital innovation, and obviously, not everything is successful. I think we can count some 15% of success stories out of all the digital innovation we’ve done in the past years through the DigiFund.

Sanjog Aul [00:06:34]:

Now what you’ve shared, of course, are the core tenets of how make how to make digital transformation successful. While you may envision something in among the top brass, people at the top, and you would give some blessings and support, but then bringing the discussion back to culture, that’s where it is the individuals on the ground who you expect to behave in a certain way, understand that there will be very different or newer innovative things or things therefore which they will have to come out of their comfort zone to operate, that would be required of them, and you have to come out of being territorial in your respective department and start thinking holistically, and you will have to keep going to keep focus on your customer as we go about going digital because at the end of the day, you’re doing it for the customer. All of that requires not just the numbers, not just the tech. You need the same people who used to work in the pre-digital era to shift mentally, emotionally, the kind of support they are expecting so that they blossom, and when they blossom is when digital transformation dream will actually be fulfilled, but that’s where it seems like the culture part has been fuzzy at best, and the progress in building a digital culture, that’s not understood and or measured to a point where you’re feeling satisfied. So in absence of that, we are really not able to pinpoint our finger why, even though we are spending the same type of money, giving the same kind of blessings from the top, but still the change is not happening. So let’s dig deeper into this culture. What is so out of control, out of bound, or confusing about digital culture which we are not able to put our fingers on?

Teemu Salmi [00:08:45]:

And I think if I continue to build on the story then, I think that one way of addressing it and one way of actually looking at it is now I’m getting into my third C, which is competence and capability because there’s also a literacy thing here. I mean, of course, culture, you have to have. You have to be you won’t change culture overnight, but you can inject capabilities in a company to see how you work with different aspects on innovation, for instance, to build the right capabilities and competence, and eventually start shifting and start changing the culture. Because cultural change, I mean, we’re a company. We’ve been around for over 700 years. So you don’t shift that culture overnight. So it will be an incremental shift, so to say, towards new ways of thinking, new ways of working, accepting failure, stepping out of your comfort zone, etcetera, just like you mentioned, and for us, one successful way of doing that has been working with startups. Startups, and we’re not in the equity game. We’re not there to buy the startups. We’re there to collaborate in the industry venture approach with startups, saying that we want to be your first big customer for your product and your solution. So we have injected the startup mentality and also actually developed a training program for our most senior leaders, where we are putting them side by side with startups to learn how startups are working, why they are so agile, why they are so fast, and we have also connected that to some university studies together with the university in Finland, and we run programs of 6 months where these senior leaders have gotten an insight in how startups work, then coming back to their line position in the organization to start changing our ways of working with the learnings that they’ve been getting from working with the startups. You have to get an outside-in perspective, is my view, in order to start changing the culture. It’s very hard to do an inside-out transformation when it comes to changing culture. You need the sparks. You need the ideas. You need to see different things, and I think it’s a lot of a leadership question that you dare and that you challenge and that you look at new opportunities of doing what you’ve done previously in a different way for the future.

Sanjog Aul [00:11:22]:

So very interestingly, you mentioned partnering with startups, and they are naturally built to move at a very warp speed or shift their directions and be more nimble than a larger organization. So, yes, that is good to get something done, and, essentially, you are outsourcing capability building there. Now if you have your own organization, and since those people are slow to move and or the people who are well entrenched in the pre digital culture, if you have to change it, your response to the question was we build capabilities. Now those same people who are not as interested in building capabilities or perhaps they don’t have the core DNA, so are you saying that if someone were to use the path to building a digital culture to start from building capability first and the capability in order to build capability, the existing people are not either qualified or ready for it. So do we clean the house and bring brand new people, and that’s how you get the culture built?

Teemu Salmi [00:12:35]:

No. That’s not at all how I see it, and one has to realize that in a big company like ours, there are like in any other society, people who are more prone to change than others, and that you have to respect. We’re all different as human beings at the end of the day, and I don’t think that you can lift and shift the whole organization over time, and I don’t think you even should do that because you have a great lot of assets when it comes to competence and understanding and experience that you don’t want to waste, but what I think you should do is to combine that experience, the traditional ways of working with some new ways of working, some new ways of thinking, and if you combine those and you get a spark that actually can trigger the non-prone change people to actually help drive the innovation agenda, that’s when you become successful. I think it’s in the crossroads of, if you take the example again, startup way of working and having the experience from the corporation, when those meet in a good way, that’s when magic can happen.

Sanjog Aul [00:13:48]:

Let’s take a quick break, listeners. We’ll be right back, and, Teemu, I heard a quote from someone who said, you get what you work at. So which means if you want a good digital culture, you got to consciously and deliberately work on it, but then, if you were to work on it, some companies or many companies for that matter have a vague idea about where they are and where they want to go, which means what is the culture, how can they define the culture with its attributes today, and then a destination, which has got its own set of attributes and what you would define as a culture. So when you are going from one fuzzy to another fuzzy, not sure where we will ever get, or maybe will we ever get to the place where we want to. How can we do better? What could be an approach we can take just focusing on culture for a second and crack this problem or at least attempt to crack this problem? What would be your recommendation? Please stay tuned, listeners. We’ll be right back and discuss with you.

Speaker 0 [00:14:59]:

Today, enterprise technology is both strategic and global. Each week on CTN CIO Talk Network, IT thought leaders from around the world share their experience with listeners as they discuss with Sanjog Aul how they are trimming costs and partnering with business to innovate and help IT become more competitive, better care for customers, and improve the corporate bottom line. If you want to keep up with IT thought leadership, listen to CTN, CIO Talk Network with Sanjog Aul at ciotalknetwork.com. From the boardroom to you, Voice America Business Network. You are listening to CTN CIO Talk Network with Sanjog Aul. To learn more about our program, please visit ciotalknetwork.com. Now back to the show.

Sanjog Aul [00:16:02]:

Welcome back. So Teemu’s fuzzy vision of what the culture needs to be tomorrow and currently not knowing where we are with the culture doesn’t really help anyone, whether small or large organization. So if you were to come outside in, maybe get $5,000 an hour consulting fee, but actually ask questions of a company, of where they are with the culture, and where they want to go, and then help them build a road map for it. How would you have done something like that? Give your best shot.

Teemu Salmi [00:16:42]:

Oh, that’s a million dollar question almost, but for the $5,000 an hour, I’ll give a shot at it. I’ll hold you accountable for it. No jokes aside, I can give you my perspective. I’ve spent most of my career in large corporations. The large organizations where you have a line organizational structure. The line is king, and you kind of drive your execution throughout the line, and I think that’s one of the big barriers as well to cultural change. I think that, if you want to change culture, you should probably also organize yourself topically. You should organize yourself around a purpose. What do you want to do? What do you want to create? Today, line organizations with different KPIs, with different measurements, do not always support an innovation agenda that goes across the company, because topics usually go across the company, and one thing I would probably look at from a culture perspective of changing would be that. How do you get rid of the line organization to create teams that actually work with a topic or a purpose more than fulfilling a line KPI. That is at least my experience from working 25 years in larger corporations, that you always have to fight the line, and I have asked myself, why? Why don’t we organize ourselves a bit different with the topical purpose?

Sanjog Aul [00:18:09]:

So if you were to suggest who are currently responsible for a given line of business or executive management or HR, and you were to ask them the questions which will tell you where they stand with their culture, what would such questions be?

Teemu Salmi [00:18:32]:

That’s another million dollar question for me. Many of those today. Well, I think that the traditional way would be to look at the P and L. You would look at the balance sheet, and those would give you the answers, are we successful or not? But it doesn’t tell you anything about how people feel, how motivated, how engaged are people with working, with fulfilling those P and L’s and those balance sheets. So the questions probably to ask is, what do you need to excel and to deliver more when it comes to reaching the objectives of what you’re working with. Those are the questions that we should be focusing on more because I think that when you have the motivated and engaged people, then you will also deliver the financial results at the end of the day. So I think you should flip the way of actually measuring and delivering in an organization compared to how we traditionally do it in a corporate today.

Sanjog Aul [00:19:30]:

Would you rather give this effort of defining a digital culture a chance where the people drive it versus people from the top in ivory tower telling what that culture should be? Could it be an inclusive effort? And if yes, how will you pull that off? Suppose you’ve got thousands of workers coming and each one can give the data, but they would not be as open to sharing the data, and you would then say, okay. Let’s do an anonymous survey, but then some things will be left to chance and we don’t know whether this data is correct or incorrect. So if you were to get almost rally the troops at the field level and get them to say, guys, we are gonna work on our culture. Maybe you’ll not word it that way, but somehow get them involved so they drive it. Don’t you think it would be an awesome outcome almost guaranteed because they’re the ones taking ownership of it? Because once you say this is what’s gonna be our culture, adoption is automatic because they were the owners of and the creators of that culture definition.

Teemu Salmi [00:20:32]:

It’s a very timely question, I would say. Let me give you a practical example, and I mean, if I only look at my organization today, I don’t have a big organization in the IT and digital organization. We’re roughly 500 people today, globally based, mainly European, but I have a smaller department also in China. Every year, we run something called an all leaders meeting, where we look at our strategy. We look at where we want to go, what’s the company strategy, and how do we make sure that IT and digitalization is not the fifth wheel. It’s actually incorporated in the engine of the company. This year’s all leaders meeting happens next week, actually, and we have 3 topics on the agenda. One is we have just tuned our company strategy. What do we need to do to tune our strategy? The other two topics I have are leadership and culture, and when we’re going to work these topics, we’re going to do exactly what you said. We’re going to work them bottom up. We know where we want to go, because we know where the company is heading. Now we’re going to work the strategy bottom up, and we’re going to work the culture bottom up as a second step. So in order to fulfill our strategy, what is one, the leadership we need, two, the culture shift we need to have in order to enable the execution of our strategy as well, and this is not me, my leadership team, or my boss telling us what the culture should be. It is actually exactly what you say. We’re doing it bottom up with the people of the organization saying, what do you need in order, from a culture perspective, to excel and deliver on our targets.

Sanjog Aul [00:22:19]:

Now when you are looking at the cultural aspects, among many that could exist, which one would you say are the most critical for digital success?

Teemu Salmi [00:22:33]:

Well, I think there is this classical, allow failure, and fail fast, and those might be classical, and they might be a bit boring statements, but they are so very true, and there’s another thing, I don’t know if it’s culture practical, but you need to make sure that people get time as well. You have to have time in order to change culture. If you just keep running and never pause and reflect and look in the rear view mirror and say, what happened, actually? You’re not going to be able to change your own future. So you need to set time aside to reflect and to build the future, and failing fast, I think that that is also once you innovate, once you try, allow people to fail. I mean, failure is not a failure if you bring the learnings from your failures with you for the future, it’s actually an investment, and I think these are the things that you need to incorporate in leadership ways of looking at failure. That failure is good if you just bring it with you for the future. Those are fundamental things that I at least try to work, and this goes back to leadership. Because culture and leadership, they go hand in hand. For me, you can’t separate those. Because the way you act as a leader, the way you speak as a leader, not only as a single leader, but all leaders in an organization, that is what all your employees will listen to and look up to, and you have to not only speak, you have to also show it and walk the talk, but if you do that, and if you actually show that you appreciate people when they act according to what you say, and you give positive feedback, then, of course, you are starting to change the culture, and people will dare more and more to change towards the culture that you want to implement.

Sanjog Aul [00:24:24]:

So some of the attributes, I’m gonna just list them out for you. Meaning or purpose of where you’re going and why. Then respect or fairness, or trust and integrity, or responsibility and accountability. These things are not directly connected to digital, but to what degree? They are far more foundational if you notice. Any organization should have it.

Teemu Salmi [00:24:53]:

Yes.

Sanjog Aul [00:24:54]:

So do you think for us to really, rethink a culture, we got to start at that ground level, at a human level versus thinking company first, so we are talking result orientation, for example. Or we talk about decision making. These are all company centric or corporate objective centric, but if you want to fundamentally change people, should we not be looking at respect and fairness and trust and integrity and meaning and purpose, because people follow a vision which has a purpose. So they say companies follow purpose, or people follow purposeful organization, or want to work with a purposeful organization. So can we, in some way, give digital culture a flavor or maybe define it in form of a purpose that a company is trying to meet so that there is an automatic following by the people versus us saying, we want to go here as a business because we are paying you, you follow us there.

Teemu Salmi [00:26:07]:

I don’t think it’s a trade off, to be totally honest. I think you need both. I think that both need to coexist, to a certain extent. You have certain company objectives that you have to meet. I mean, you know, that’s given, but I think a lot about the how, how to execute it, how to get there. There you need to have some freedom. I think that freedom looks a bit different based on what you do in your daily job. Take an example. If you’re an operator running a machine, maybe you shouldn’t get too much freedom in how you operate that machine because that might actually ruin the whole production for a day or a week. So while when you’re doing some innovative tasks, maybe that’s when you have to have the totality of freedom. So it’s not the trade off. You need both, and you need to have process orientation, and you need to have open, innovation culture as well. I like some of the words that you used there describing culture. My culture leadership philosophy that I developed myself when I was growing up as a leader, I usually talk about AAA. AAA from many perspectives. I usually take the financial industry as the example. If you have a AAA financial grade, that’s usually where companies want to go from a financial perspective, and then you’re world class, you’re kind of outstanding. I put that analogy into people. I want the people in our organization to be triple A, and then, of course, what do the triple A stand for? Accountability, availability, and attitude, and, of course, if you start talking about these things, you have this story. I have presented this to my team now a couple of years, and we’re working with the triple A deployment and implementation and what that means for us, and that’s where you can actually start then tying up your cultural change and your cultural transformation on these topical things. So triple A for us is kind of the leading star and has been for me in various companies or various positions I’ve been working in. I always bring that with me because it’s close to my heart. I believe in clear accountability. Be accountable. I believe in availability, be there for your colleagues, be there to support, and be there to help, and last but not least, attitude. With the right attitude, you move mountains, and I think that attitude is so fundamental; positive, can-do, winning attitude then goes before any kind of competence or capability in my book.

Sanjog Aul [00:28:55]:

Let’s take a quick break, listeners. We’ll be back, and, Teemu, when we come back, let’s talk about the mistakes people make or the learnings that we get along the way as we try to build the digital culture and introduce such related attributes in an organization. What are the gotchas and the pitfalls we must watch out for as we are trying to transform the culture or at least enable a digital culture? And how can if the problems you already see in place before you tackle it, how do you go about addressing such challenges so you get over them and you’re well on your way to building that conducive digital culture? Please stay tuned listeners. We’ll be right back and explore.

Speaker 0 [00:29:47]:

Today, enterprise technology is both strategic and global. Each week on CTN CIO Talk Network, IT thought leaders from around the world share their experience with listeners as they discuss with Sanjog Aul how they are trimming costs and partnering with business to innovate and help IT become more competitive, better care for customers, and improve the corporate bottom line. If you want to keep up with IT thought leadership, listen to CTN, CIO Talk Network with Sanjog Aul at ciotalknetwork.com. When it comes to business, you’ll find the experts here. Voice America Business Network. You are listening to CTN CIO Talk Network with Sanjog Aul. Now back to the show.

Sanjog Aul [00:30:47]:

Pitfalls and gotchas. Lot of them could happen as you try to introduce a culture or fix a culture so that it’s conducive for digital. What are those? What did you experience while working at your current organizations or you’ve seen your peers working in their respective organizations? And what are some of the solutions which work to address such challenges or issues as you go about building the conducive culture for digital?

Teemu Salmi [00:31:16]:

I would say one of the pitfalls is the not invented here syndrome. I’ve come across that in many of my positions and also now in the job that I’m doing currently. There is a suspiciousness towards things that you have not been inventing yourself, and why shouldn’t there be a more openness to work with ideas and stuff that has been developed by someone else that could benefit you as well in whatever context that might be? So, of course, that’s a hindrance for building an open end-to-end culture in any company because you’re closing out. You’re not letting in. You’re not really listening. You’re not being transparent all the way. So I think not invented here syndrome is something that I’ve come across quite a lot in many of the jobs that I’ve had, and that’s, of course, also hindering from a benefit realization perspective because it’s hard to, for instance, scale up and scale out ideas as well if you’re not open to listen and to learn and understand from others what they have done that actually makes a lot of sense to you and what you do on a daily basis as well. So you’re neglecting learning. You’re neglecting investments, and you’re neglecting the transition of competence from someone else to yourself and your organization. Those are classical pitfalls that I’ve seen now and also in the past.

Sanjog Aul [00:33:07]:

Now if you were to figure out a game plan, suppose you come in as a consultant or anyone who’s trying to get started with building a digital culture, at least improve from where they are to getting to the best level they can, would you chip away at it, or would you say we have to rip and replace? Why I say that is because sometimes the toxicity has a tendency to reappear. The people who were having inertia, they’re tough to change and you yourself mentioned that, you know, not everyone would agree, but then that could also, depending on percentages of such people or that sentiment, it will try to surface again and again, and it will grossly undermine your effort that you put in. So are you better off saying that, hey, I will cut my losses, or I will rip what it was here today, maybe move people in an island who are toxic or counterproductive. We’ll deal with them separately and start building that culture from scratch. Or would you just say, okay. It’s an ongoing journey. I can go for another decade doing so, and let’s just chip away at it, do the best we can with what we have.

Teemu Salmi [00:34:25]:

I like building positive examples, and I think building positive examples is one way of actually starting the journey, starting the transformation and getting people on board, and also practically understanding why and what made that thing so successful. I’m really, from that perspective, very practical and try to live on that and try to build on that for the future as well. Let me be very practical on an example as well. I can only go back to where I spent most of my career, which is in traditional line organizations, in big corporations where you have a lot of people and you follow the line. The line is king. One successful learning I’ve seen is that when you actually pull out people from different parts of the line organization, you give them a horizontal task to solve or a horizontal challenge to solve, an opportunity, and you spark that with some external capability or competence of how to drive change and how to think a bit differently. Then you actually get the change engine mobilized, and you also can move things, you can move the needle for real. That’s when I’ve seen the best innovation efforts also taking speed when you do that. Of course, you need to make sure that you, at least in the beginning, start pulling out people who you know are open-minded, who are open to change, and who are also willing to actually contribute a little bit out of their normal day-to-day job role, and I would say for me those initiatives have been the most successful and fruitful, and then, of course, building on that, showing the example, showing the outcome of what these teams have actually accomplished with horizontal challenges that go cross-line, that’s when you have a good starting position to actually do some practical cultural changes in any company.

Sanjog Aul [00:36:40]:

Now, if you would say that you had to look at the people side, and then I mentioned about something like trust and integrity, and that the purposefulness of the vision. Do you think the way we are approaching enabling digital, if we strictly say we got to do digital because we got to meet shareholders’ expectations, or we have to meet our revenue and profitability goals, do you think there could be some temptation for people to lose their integrity and break trust because they get too anxious to show to the outside world how great we are doing? And then secondly, if you become so business focused that even though you say you’re customer focused and business focused, but then you don’t have something bigger that you’re doing in terms of contributing to the society and others, do you stand to lose the opportunity for people to follow your organization versus taking orders from you?

Teemu Salmi [00:37:53]:

My personal experience is that most people actually are loyal and most people really want to improve, want to make a change, want to make a difference. For me, it also depends a little bit on in what context you put an activity. If you forcefully drive objectives that are too far away from the individuals, I think that you will lose the energy. You will lose the momentum, and you will also lose the innovation and creativity as well that you need. I think that, as a leader, you know what activities need to be done in order to reach overarching objectives for any organization. You just have to mobilize the energy, and you have to be able to break that down into smaller activities that are close to the people who actually know what to do, and energize and mobilize the change inertia there to drive those small activities that are really close to these individuals, but where you as a leader know that when they solve those problems, they will actually in small pieces contribute to the bigger picture and actually make you reach your targets and objectives, but if you only talk about the high level objectives and targets, you will actually disconnect, I think, many people from their daily operations. So if you don’t make that linkage and don’t have that end-to-end understanding and view and are able to articulate that and help and mobilize the teams on the ground, then I think that you will not be so successful at the end of the day.

Sanjog Aul [00:39:42]:

So let me compare digital transformation to a sprinter or a marathon runner. You’re not doing digital for today. You’re embracing it for good, and what you’re transforming to right now will become passé in maybe 3 years, 5 years max. So you’ll have the next new thing that’ll come. So what you’re doing is you’re not getting your people to change to just do a 100 meter dash and not participate again. They’re supposed to go for a 36 mile or 25 mile marathon, and the training for a marathon runner is entirely different than for a sprinter. So if you’re keeping your focus, there’s nothing wrong with keeping your focus on that immediate deliverable, like you mentioned, the person will lose focus on it, but then they will, if they only kept focus on that next deliverable, then you will have to spend multiple times extra time, money, and effort to get those people to become warmed up again for the next immediate thing. So what’s that balance that you don’t undermine the potential of success for the projects you have in hand while you’re doing that long term marathon-centric muscle building of the organization? So any new thing that comes, you are not working on fundamentally shifting your culture yet again. So culture is not being changed for one project or one initiative or one annual report. It’s being done for good because you are building this new muscle, which you will need in times to come. How would you approach something like this?

Teemu Salmi [00:41:27]:

I think you’re spot on there, and I think that what you have to actually disconnect is the technology piece from the culture itself. Because rightfully, you said there will be new technologies not in two or three years but next week. The pace of the technology development and evolution is just speeding up. It’s going faster and faster. So we are overwhelmed with new technology. It’s not about technology at all. It is about embracing change. The companies and individuals in a company who are fast enough to change and adapt to new realities are the ones who will win at the end. So you have to be able to deploy a culture where you are receptive to change and receptive to input and understand and digest and handle different kinds of inputs in order to understand what that means for you and then shift gear based on that analysis. Whether that is digital, whether that is pandemic related, whether that is whatever related, the companies who build that culture will be the winners at the end. Because if you stand still and neglect the input that you’re getting from your surroundings, those will be the first steps towards not the direction any company would like to go. That’s my take on that one.

Sanjog Aul [00:42:58]:

Let’s take a quick break, listeners. We’ll be back, and let’s see if there is a way for us to put some governance in the process of changing our culture. What I mean by that is we got to be able to find if what we set out to do in terms of shifting our digital culture is that working? Or the changes that we are putting in place at any given time, the benchmarks that we had we had established, is it meeting that benchmark? And are we even doing that act of checking what we thought we will check? Which is governance, and for any governance, we need measures and benchmarks. So, in context of digital culture, what kind of a governance would be put in place, what kind of checkpoints we will put in place, what kind of related benchmarks we must institute, to ensure what we have set out to do, we are doing it methodically, and we are planning for success versus shooting from the hip. Please stay tuned, we’ll be right back and explore.

Speaker 0 [00:44:18]:

Today, enterprise technology is both strategic and global. Each week on CTN CIO Talk Network, IT thought leaders from around the world share their experience with listeners as they discuss with Sanjog Aul how they are trimming costs and partnering with business to innovate and help IT become more competitive, better care for customers, and improve the corporate bottom line. If you want to keep up with IT thought leadership, listen to CTN, CIO Talk Network with Sanjog Aul at ciotalknetwork.com. When it comes to business, you’ll find the experts here. Voice America Business Network. You are listening to CTN CIO Talk Network with Sanjog Aul. To learn more about our program, please visit ciotalknetwork.com. Now back to the show.

Sanjog Aul [00:45:22]:

Welcome back. So, Teemu, the governance for any change that we want to bring about becomes very important because we can do all the big talks, but then when you have to have the rubber meet the road, people have to come in together and managers, leaders, the operational staff, everyone says, yes. We are committing to it, but then as the time goes on, life can happen. Business can happen, which can take us away from our eyes on the ball, and we could lose it. So that’s exactly where you need to have checkpoints. You need to have a governance in place. So you’ve got to have measures, which is true for any other project that you might do, technology or otherwise, and should it not be for the culture transformation as well? If we can do it, what would that governance look like? What would those checkpoints and measures and benchmarks look like which we’ve put in place then we are planning our success?

Teemu Salmi [00:46:21]:

I think from my perspective there’s probably a couple of dimensions to that, but let me start with maybe a simple example. We are in the midst of trying to take the first steps at agile ways of working where we are putting our IT organization and our business organization for a certain business segment together and saying, okay, let’s now get away from the old ways of work in the traditional waterfall projects that take for ages. Let’s look at deploying agile ways of working and then you can use different processes and methodology, SAFe, Scrum, you name it. When you look at the processes and ways of working, you actually find very interesting KPIs that you can measure whether a culture is changing or not. Take the simple example of working agile where you have daily stand-up meetings. Did they happen? Did they cover all the topics they were supposed to cover? Did you update your whiteboard? It’s stuff like this, simple KPIs to actually see that you’re working actively with changing the culture practically based on processes and ways of working. That I think is a simple way of trying to measure a culture change in the company, and the second view of this, which is more soft than hard, is when you look at it outside-in, do you attract the right talent to come work for you? How does your external pipeline look like when you recruit people? Do you get a lot of ad hoc asks for joining your team, which we have been lucky with right now? In building up our digital team, we’ve actually had people wanting to join us without having any open positions. If you are able to attract talent from outside, then you probably have a good culture in place because people want to come and work for you as well. That’s a bit harder to measure. Of course, it’s intangible, but at least I’ve seen it, and I’ve been very positively surprised about it because it’s a receipt of good work that you’re doing, establishing a place where people actually want to come and contribute and work with you.

Sanjog Aul [00:48:48]:

Now what you mentioned about getting people in the room and making sure that they are working on it, like you say, in a software project you would do in Agile and make sure things are being measured. The conversations that would happen around culture building, whether at the planning stage or at the execution stage, how do you envision those activities? Because it’s a project. Even though we don’t want it to be, or it may be a project with no end date per se, but at least a foundation building project. So how would you expect, if suppose you were exclusively said do nothing else but help build a digital culture or focus on building a digital culture, how would you structure such an effort?

Teemu Salmi [00:49:32]:

I’ll go back again to what I said previously. If you continue on the example of working in agile, what is different with that compared to the traditional ways of working with classical waterfall projects is a couple of fundamental differences. One is that you have what I call the end-to-end organization in place, the horizontal organization in place, where you have key people from the technology department, the IT department, and you have key people from the business department, who on a day-to-day basis can prioritize what is important actually to do in order to enable business success. In classical waterfall projects, you don’t do that. So one thing you actually get is that you get the relevant business discussion on a day-to-day basis happening with the people who need to discuss it and with the people who actually can make a change and that are accountable for making a change. That is a huge difference in the ways of working compared to Waterfall. The discussion is always about how can we, as a team, enable the business success, and at the end of the day, that’s what you want. You want to have an empowered team that can prioritize based on what they know is needed for business success. You don’t want the top-heavy organization where all the decisions come from the top. You want to give guidance from top, and you want to have this self-organized, self-mobilized team to actually fulfill the strategic objectives by making decisions on their own based on being and working together cross-functionally.

Sanjog Aul [00:51:14]:

One last question. Since we know there’s lot of uncertainty, you talk about pandemic or the pace of change in business. There are so many things which are shifting on a regular basis, and which also means the very people, whether leaders, mid management, or the field staff, all of them there is churn at all levels, and culture essentially is a makeup of what kind of people we have in the organization who think in a certain way and do they think together as one cohesive unit. With all these shifts and the flux that is happening, how can you build a sustained digital culture, which will have the staying power and which will not get disrupted every time someone leaves?

Teemu Salmi [00:51:56]:

If you have fundamentally good ways of working in place that you have built bottom up with your organization, where the people in your organization have contributed in telling how you should actually execute your objectives, I don’t think that even if you have churn in people and leaders, and if you keep on embracing the importance of inclusiveness and making sure that you inclusively develop and drive the change of ways of working and you do it bottom up, I think the bottom-up power will always be available in any organization if you just let it flourish. I think that would be my take on that.

Sanjog Aul [00:52:42]:

Once again, thank you so much, Teemu, for sharing your thoughts and insights about how organizations can work on building and enabling a conducive digital culture, which will allow them to exploit the opportunities and also develop their people. Thank you so much.

Teemu Salmi [00:52:59]:

Thanks for having me. It was a pleasure talking to you. Thank you so much.

Sanjog Aul [00:53:03]:

Absolutely. Thanks again, and listeners, hope you got some value out of the conversation. Please connect with us on social media. Subscribe to our podcast and stay in touch, and continue to give us feedback on how we are doing. Once again, thank you for listening to CTN. This is Sanjog Aul, your host till next week. Take care, and God bless.